Nordic power surge will not deter Facebook's data centre plans

OSLO (Reuters) - A surge in power prices in the Nordic countries will not deter Facebook (FB.O) from looking at building data centres in the region, a company spokeswoman said.

FILE PHOTO: A Facebook panel is seen during the Cannes Lions International Festival of Creativity, in Cannes, France, June 20, 2018. REUTERS/Eric Gaillard/File Photo

Sweden and Norway have traditionally had low electricity prices, making them attractive locations for power-hungry data centres that big digital companies need for their operations.

Microsoft (MSFT.O) recently announced plans to build two data centres in Norway and Facebook last month decided to expand its data centre in Sweden’s northern city of Lulea, strengthening its Nordic operations.

But power prices in Sweden and Norway are now double those of 2017 as inflows of water to hydropower reservoirs are expected to decline this year.

Facebook spokeswoman Camilla Nordsted said: “We take a long-term view towards our investments and the ingredients that make them successful.”

She said the company would not be affected by unusual short-term power price levels in the region, as Facebook had signed a 15-year power purchase agreement (PPA) with three new wind farms in Norway.

“The 15-year PPA term provides the long-term financial certainty necessary for the projects to be financed, constructed and operated,” she said.

In June, power prices in Norway surged above 45 euros per megawatt hour, double year on year, but the price is only one of the variables Facebook is considering.

“Supportive state and local partners, a shovel-ready site, good access to fibre and power, access to renewable energy, a strong pool of talent for construction and operations staff,” are important things to consider, Nordsted said.

Facebook is working on evaluating a number of potential new sites for its operations that it aims to power with carbon-free energy, Nordsted said, but she declined to identify specific plans at this stage.

Outside the United States, Facebook currently has or has planned data centres in Ireland, Sweden and Denmark, according to data published by the company.

Norway and Sweden recently lowered their data centre taxes to attract more investments in the region, which is rich in power from renewable energy sources such as hydropower dams and wind farms.